Opinion

Old friendships alone won't save us from climate change

It should not be a surprise that the independent panel advising the government on how to better spend $2.5 billion on clean energy projects has proposed that it should kick the door open to, well, dirty energy.

The man tasked with leading the panel, Grant King, was managing director of Origin Energy before he became the Business Council of Australia boss in 2016.

Among the recommendations he made was one to encourage more investment in carbon reduction schemes by allowing coal and gas industries to apply for funding for carbon capture and storage projects.

Carbon capture and storage is backed by the Australian coal industry, because it involves burning coal, but opposed by climate scientists, because it is unproven and expensive.

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Extractive industries are similarly well represented on the National COVID-19 Coordination Commission, the body convened to advise the government on how to mitigate the economic fallout of the coronavirus shutdown.

It is led by Nev Power, former chief executive of Fortescue Metals Group, current deputy chair of Strike Energy. It is advised by Andrew Liveris, a board member of Saudi Aramco and deputy chair of the resource engineering firm Worley. Its membership includes Catharine Tanner, managing director of EnergyAustralia and James Fazzino, who is also on the board of

APA, an energy infrastructure company.

It is no accident that these are the men and women in the room as the decisions are made. Fossil fuels have been dominant energy source over the modern era and as a result energy companies have relationships with governments fostered over generations.

Not only do politicians understand their pet projects, their top personnel are embedded in government while advocates of new ideas are too often banging on closed doors.

Professor Frank Jotzo, director of the Australian National University's Centre for Climate Economics, observes that the recommendations of the men and women picked for these advisory roles carry not only the weight of their own expertise, but of the billions of dollars of value that their industries represent, of years of well-funded and well-orchestrated lobbying, and of the unstated threat of the backlash these industries are capable of unleashing when crossed.

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It cost the mining industry, Jotzo notes, just a few million to derail Kevin Rudd’s signature resources super profits tax and arguably begin the obliteration of his authority as leader.

In their 2018 book on the political economy of fossil fuel subsidies, the British academics Peter Newell and Phil Johnstone argued the only way to properly understand governments’ continued support for fossil fuels in the face of overwhelming evidence of potentially catastrophic climate change is to recognise “the extent of the depth and reach of fossil fuel incumbency”.

Jotzo says that in his view the proposals made by King are “not bad”. He believes that while they leave the door open for fossil fuel interests, renewable energy projects are likely to win funding on merit in any case. But now is hardly the moment for “not bad” ideas.

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As world governments embark on a US$5 trillion ($7.7 billion) spending spree, many are directing their focus to green initiatives. The EU is discussing setting border prices on carbon, while the United Nations Secretary-General Antonio Guterres has urged governments to use historically low oil and gas prices as an opportunity to end subsidies to fossil fuels, which the International Monetary Fund last year estimated to cost Australia $29 billion annually once the impact of pollution was factored in.

Both of these ideas are better than “not bad” and neither appears to be on the horizon for Australia. But they should be.

The news is not good. Yes, emissions dropped by a staggering amount in the early months of the year – up to 17 per cent a day by early April. But averaged over the year the drop will likely turn out to be between 4.2 and 7.5 per cent.

Which is to say that having suffered the greatest global economic crisis since the Great Depression we are just meeting the reductions targets we are going to have to hit, year after year, if we are to limit climate change to 1.5 degrees of warming. In other words, we cannot expect to rebuild the old economy and stave off global warming. And we cannot do it relying on the old guard alone.